Healthcare chief executives Peter Gregg and Colin Goldschmidt, whose businesses have been stung by pathology funding cuts, have criticised the government's health policy and warned that Australia was taking its first step toward a two-tiered system of care.

Mr Gregg – the chief executive of Primary Health Care, which has 71 medical centres, 100 pathology labs, and 168 diagnostic imaging sites – said the shock proposal from the Turnbull government to cut bulk-billing incentive payments for providers was "a slap in the face" for medical professionals.

Sonic CEO Colin Goldschmidt says Australia is taking its first step toward a two-tiered system of health care.Credit:Kirk Gilmour

The incentive fees were designed to support levels of bulk billing. Their abolition must still pass through the Senate but is slated for July 1.

Advertisement

However, both Primary and its rival Sonic Healthcare, which is run by Dr Goldschmidt, said the publicity around the cuts had already begun to discourage patients from getting tests. This trend, and the effect of cuts to fees for Vitamin D tests, which were implemented in late 2014, were a drag on interim profits, announced by both companies on Wednesday.

Health Minister Sussan Ley should expect both companies to step up their campaign against the proposal. "My feeling is for both pathology and radiology this is not a done deal yet," Dr Goldschmidt said. "Particularly with the big media and public collection centre-based campaign about to be launched."

Previous governments have succumbed in the face of aggressive, community-led campaigns against cuts to health funding. Former health minister Peter Dutton backtracked​ on the controversial co-payment for GP visits after a concerted campaign by the doctors' lobby, while the powerful guild representing pharmacy owners is feared in Canberra for its sway in the community.

Political influence

Dr Goldschmidt sought to underline the kind of political influence the pathology industry could wield. "There's something like 5000 collection centres right around Australia. Sonic has about 2000," he said. "We reach something like 1 to 2 million patients per month through those collection centres. We have access to a lot of people."

Even if the cuts remain, Dr Goldschmidt warned that Sonic was considering introducing more co-payments for pathology tests. About 98 per cent are bulk-billed now, he said. "I wouldn't like to answer that question unequivocally at this point, other than to say in general we are tending in that direction."

Mr Gregg said he was piloting selective out-of-pocket charges for some tests and scans to recoup the fee cut.

"The government has done what it has done without any consultation with the industry despite promises they would consult. They either don't understand or they are deliberately misleading the Australian people … we will have to introduce co-pays and out-of-pockets," he said.

"The minister [Mrs Ley] keeps coming out and saying 'we have no obligation to make the healthcare sector profitable'. Well we have no obligation to make government policy work."